Definitions for price-to-earnings ratio
price-to-earn·ings ratio

Princeton's WordNetRate this definition:0.0 / 0 votes

1. price-to-earnings ratio, P/E rationoun

   (stock market) the price of a stock divided by its earnings

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1. price-to-earnings ratio

   The price-to-earnings ratio (P/E ratio) is a financial metric used to determine the valuation of a company. It is calculated by dividing the market value per share by the earnings per share (EPS) over a certain period. The P/E ratio measures the price paid for each dollar of earnings and is often used by investors to determine if a company's stock price is overvalued or undervalued compared to its earnings. High P/E ratios may indicate that the market expects high earnings growth in the future, while low P/E ratios may suggest the market has lower expectations.

Matched Categories

1. • Ratio
   • Stock Market

How to pronounce price-to-earnings ratio?

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Numerology

1. Chaldean Numerology

   The numerical value of price-to-earnings ratio in Chaldean Numerology is: 7

2. Pythagorean Numerology

   The numerical value of price-to-earnings ratio in Pythagorean Numerology is: 2

Examples of price-to-earnings ratio in a Sentence

1. Adam Sarhan:

   Apple is an undervalued growth stock and has been for many, many years, even though it is the world's largest company, its price-to-earnings ratio is still below that of the S&P 500.

2. Jelena Sokolova:

   > LONDON, Jan 31( Reuters) - Europes glittering luxury companies, the regions top stock-market performers in 2023, may see yet more gains driven by a rebound in Chinese spending, but for some the sector is starting to look expensive.The likes of French luxury giant and Louis Vuitton-owner LVMH, and Swiss jewelry company Richemont( CFR.S), have benefited from the resilience of their wealthy customers against the cost-of-living crisis.Since the start of 2023, Chinas decision to allow more normal activity and dismantle its strict COVID-19 restrictions has provided another boost for the sector.An index of European luxury goods retailers(. dMIEU0TA00PUS) has rallied around 18 % so far this year, outperforming the wider pan-European STOXX 600(. STOXX), which is up 6.2 % in the same time frame.But the fact that luxury goods companies are not as cheap as they once were is a concern/point of attention, said Kasper Elmgreen, Head of Equities at Amundi, Europes largest asset manager.They’re much more fairly valued today, there is less that is perhaps undiscovered. The risk is that when something moves to being priced to perfection there is always a higher risk of disappointment.The price-to-earnings ratio of the MSCI Europe luxury index is around 26, while that of the broader STOXX is closer to 13, according to Refinitiv data.Reuters GraphicsEuropean luxury has historically traded at a big premium relative to the broader market, but this has widened even further in recent years. At 23 times 12-month forward earnings, its current premium of 82 % is almost twice as much as the 20-year average, according to Refintiv Datastream.snapshotTHE APPLE OF EUROPES EYELVMH, Europes most valuable company by market capitalisation, has a PE ratio of around 30, while rival Hermes( HRMS.PA) has a valuation of almost 60, according to Refinitiv data. Apple( AAPL.O), the worlds most valuable company, commands a PE ratio of around 23. Jelena Sokolova, senior equity analyst at Morningstar, said that China reopening is the key issue for European luxury stocks this year, and is already at least 50 % priced in.Currently we do n’t see this sector as undervalued anymore... there were some opportunities last year, but they are fairly valued now, or a little too overvalued at the moment.

References

1. ^ Princeton's WordNet
   http://wordnetweb.princeton.edu/perl/webwn?s=price-to-earnings ratio
2. ^ ChatGPT
   https://chat.openai.com